ILP - Investment Linked Policy

What are ILPs?

ILPs are insurance policies that combine life insurance with investments into unit trust. Part of your premiums goes to pay for insurance charges that cover your needs, and part of it is used for investing.

However, as these policies are structured in a way where insurance charges will increase over time, it is technically possible that these charges may be more than the premiums payable, and begin utilising the investment value to pay for these said charges, until they are fully depleted. If and when that happens, the policy may lapse or you may have your cover lowered.

It is this realisation that has send fears amongst policyholders across the country.